The UK Supreme Court Decision in Barton v Morris and Its Impact on Singapore Implied Terms, Unjust Enrichment, and Quantum Meruit

In a research paper that we have written for the Singapore Law Gazette, we explore the UK Supreme Court’s decision in Barton and others v Morris and another in place of Gwyn Jones (deceased) [2023] UKSC 3 (Barton v Morris) and its potential impact on the treatment of implied terms, unjust enrichment and quantum meruit in Singapore.

Key facts

The key facts are the following. Mr Barton introduced a buyer to Foxpace Limited, resulting in the successful sale of the ‘Property’ for £6 million. However, Foxpace refused to pay Mr Barton the agreed-upon fee of £1.2 million, arguing that their agreement was not fulfilled as the property was not sold for at least £6.5 million.

Mr Barton claimed in the High Court that Foxpace had been unjustly enriched by his service. The High Court acknowledged Foxpace’s enrichment but ruled that it was not unjust. They found that there was no explicit agreement regarding fees for a sale below £6.5 million, and implying such terms would interfere with the parties’ freedom to define their obligations. Therefore, Foxpace was not held liable.

The Court of Appeal disagreed, stating that there was no contractual allocation of risk that would make a remedy of unjust enrichment inequitable. They overturned the High Court’s decision and awarded Mr. Barton a reasonable sum of £435,000.00 for his service.

The Supreme Court, in the latest appeal, supported the High Court’s findings. They concluded that since there was a contractual obligation to pay Mr Barton £1.2 million only if the property sold for £6.5 million, no such obligation existed if the sale price was lower. The court dismissed Mr Barton’s claim of unjust enrichment and declined to imply a term into the agreement regarding fees for a sale below £6.5 million, as there was no basis in the facts to determine such fees. 

Impact

Our paper notes that the Supreme Court’s judgment in Barton v Morris seems consistent with the Singapore position on implied terms. However, if a similar case arose in Singapore, it would remain uncertain whether the courts would adopt the Majority’s stance on implied terms on the given facts, as the Supreme Court was divided 3-2 on the issue, suggesting that a differently constituted apex court may reach a dissimilar conclusion and agree that Mr Barton ought to be paid a reasonable amount for his service.

The express term in the agreement between Foxpace and Mr Barton was clear: a payment of £1.2 million upon the successful sale of the Property for £6.5 million or more. the fact that the property had failed to sell at £6.3 million and £5.9 million suggested that the parties were aware that it might not sell for £6.5 million. In such cases, implying the term would fail the first step of the three-step test (at [101]). However, if the facts had been different and the parties had not anticipated a lower sale price, the courts might follow the decision in Wells v Devani [2019] UKSC 4 and imply a term for reasonable commission.

Secondly, the paper notices that the local development of unjust enrichment law in Singapore is aligned with the English position, sharing the same criteria for proving a cause of action. It follows that it is unlikely that the Singapore courts’ stance would differ from the Supreme Court’s decision in Barton v Morris. The Supreme Court’s ruling on Mr Barton’s unjust enrichment claim was based on the principle of upholding contractual arrangements defined and agreed upon by the parties. The Singapore Court of Appeal has also upheld this principle, emphasising the importance of contractual intention and not allowing unjust enrichment claims to undermine contracts.

Thirdly, our paper observes that in the absence of a successful claim for an implied term or unjust enrichment, it is challenging for a claimant to justify an award on a quantum meruit basis. Successful claims for quantum meruit may arise when remuneration was not fixed in a contract and its terms are fulfilled, or for partial performance when the contract has been mutually rescinded. However, we noted that courts are generally hesitant to entertain such claims. If parties willingly accepted the risks and made provisions for them in the contract, a claim for quantum meruit would not be available. Similarly, if a contract already includes express provisions for remuneration, a claimant cannot seek remuneration on a quantum meruit basis. Importantly, if the contract explicitly states that remuneration is payable only upon the occurrence of a specific event, a claimant cannot seek remuneration on a quantum meruit basis if that event fails to happen.

Ben Chester Cheong is a Lecturer at the School of Law of Singapore University of Social Sciences.

Joshua Chan Zhixuan is an Executive Officer at the Law Society of Singapore.